What is the VA Mortgage?

An In-depth Look into VA Loans

‍

 

The VA Mortgage, provided by 719 Lending in Colorado Springs, is a unique home loan benefit for U.S. military veterans and active service members. Let’s delve into the specifics of this advantageous loan program.

Overview of VA Mortgage

A VA Mortgage, also known as a Veterans Affairs home loan, is a prominent benefit for military personnel. Offered through private lenders such as banks and mortgage companies, these loans are guaranteed by the U.S. Department of Veterans Affairs. This guarantee allows lenders to offer more favorable loan terms, such as zero down payment and competitive interest rates, making home buying more affordable for veterans and active service members.

VA Mortgage Benefits

The VA Mortgage comes laden with numerous advantages over conventional loans, making it a top choice for eligible military personnel. Here’s a rundown of its key benefits.

No Down Payment Required

Arguably the most significant benefit of a VA loan is the potential for no down payment. This feature can make homeownership significantly more attainable for military personnel, who may otherwise struggle to save up the sizeable lump sum required for a down payment on a conventional loan.

No Private Mortgage Insurance (PMI)

Unlike conventional loans, VA loans do not require Private Mortgage Insurance (PMI), even when the down payment is less than 20%. This absence of PMI can result in substantial monthly savings, enhancing the affordability of the loan.

Lower Interest Rates

The VA’s backing of these loans often results in lower interest rates compared to conventional mortgages. This lower interest rate can lead to considerable savings over the life of the loan.

Flexible Credit Guidelines

VA loans are renowned for their more flexible and forgiving credit underwriting requirements. While credit score minimums may vary by lender, VA loans often have lower score requirements than other loan types.

VA Mortgage Eligibility

Eligibility for VA loans is largely determined by service commitments, duty status, and service character. Veterans, active-duty service members, National Guard members, Reservists, and certain surviving spouses may qualify.

Eligibility generally involves:

• At least 90 days of active duty service during wartime.
• At least 181 days of active service during peacetime.
• Six years of service in the Guard or Reserve.
• Spouses of service members who have died in the line of duty or due to a service-related disability.

VA Loan Process

The VA loan process, although intricate, can be navigated smoothly with the right guidance. It involves the following steps:

• Obtaining a Certificate of Eligibility (COE).
• Choosing a lender.
• Choosing a real estate agent.
• Shopping for a home.
• Signing a purchase agreement.
• Having the house inspected and appraised.
• Reviewing pre-closing paperwork and providing any additional required information to the lender.
• Closing on your new home.

Types of VA Loans

The VA loan program offers a variety of loan options to cater to diverse needs. These include:

• VA Purchase Loan: Helps qualified service members buy a home with no minimum down payment.
• VA Interest Rate Reduction Refinance Loan (IRRRL): Allows veterans to reduce their interest rate by refinancing their existing VA loan.
• VA Cash-Out Refinance: Enables qualified homeowners to refinance their mortgage and extract cash from their home’s equity.
• VA Energy Efficient Mortgage: Finances energy efficiency home improvements.

VA Loan Funding Fee

An important aspect to consider while opting for a VA loan is the VA funding fee. This fee, which can be rolled into the loan amount, goes directly to the Department of Veterans Affairs and helps fund future VA loans. Not everyone has to pay this fee—veterans receiving compensation for a service-connected disability and select others are exempt from this fee.

VA Loan Limits

As of 2020, VA no longer mandates loan limits. This means veterans can buy the home they need through their VA home loan benefit without worrying about hitting a borrowing cap.

VA Mortgage vs. Conventional Home Loans

Compared to traditional mortgages, VA loans have several advantages. These include lower interest rates, no down payment requirement, no mortgage insurance, and easier credit requirements. Moreover, VA loans are backed by the government, reducing the lender’s risk and often resulting in better loan terms.

VA Home Loan Assistance

The VA provides financial counseling to help veterans avoid foreclosure during periods of financial difficulty. Moreover, many states offer resources to veterans, including property tax reductions.

Conclusion

The VA home loan program is a phenomenal benefit for veterans and active service members, providing an affordable and accessible path to homeownership. If you’re eligible and in the market for a new home, a VA loan from 719 Lending http://www.719lending.com in Colorado Springs might just be the perfect fit for you.

Considering a VA mortgage? Contact us http://www.719lending.com/contact-us at 719 Lending today. Our team of experienced mortgage professionals is ready to guide you through the process and help you secure the best possible loan terms. Don’t wait—start your journey toward homeownership with us today.